Does placing employees on furlough prevent the employer from making them redundant?
HM Revenue and Customs (HMRC) guidance aimed at employees, Check if your employer can use the Coronavirus Job Retention Scheme, confirms that employers can make furloughed employees redundant during the period of furlough. There is no requirement for an employer to wait until the scheme ends before making redundancies.
HMRC guidance for employers states that employers "can continue to claim for a furloughed employee who is serving a statutory or contractual notice period". This would include where the employer has given employees notice of redundancy.
Employers must comply with the normal procedural requirements in relation to notice and consultation before making employees redundant.
The latest HM Treasury Direction on the operation of the scheme, published on 25 June 2020, introduced an element of uncertainty as to whether or not an employee can remain on furlough while under notice of redundancy. The Direction states that it is integral to the purpose of the scheme that amounts paid to an employer are used to "continue the employment of employees". Some commentators had argued that this could mean that a claim cannot be made where the employee has been given notice of redundancy. However, the HMRC guidance has been updated following the publication of the Direction to confirm that employers can claim for employees who are serving a notice period.